State of the Union promises to small businesses, six months later

President Barack Obama addresses injured veterans and guests at the Disabled American Veterans National Convention in Orlando, Fla., Aug. 10. During his State of the Union address, President Obama outlined dozens of ways he planned to right the economic ship this year. Where do things stand now? (AP Photo)

WASHINGTON — During his State of the Union address, President Obama outlined dozens of ways he planned to right the economic ship this year.

“Our government shouldn’t make promises we cannot keep, but we must keep the promises we’ve already made,” Obama said.

Six months later, has the president started delivering on his promises?

The Washington Post examined some of the promises Obama made on the issues that matter most to business owners. The results are mixed, with some proposals falling flat and the Obama administration struggling to make progress on others.

Advertisement

Pass tax reform legislation

Obama: “The American people deserve a tax code that helps small businesses spend less time filling out complicated forms and more time expanding and hiring.”

Status: Progress, but challenges remain.

Overhauling the tax code has been a top policy priority for small-business groups for many years, fueled by complaints that rates are too high and rules are too confusing for the average employer. Many have also complained that tax loopholes and deductions help large corporations but provide little benefit to firms on Main Street.

Obama pledged to address those complaints, and there have been signs of bipartisan cooperation on the issue in the past few months. Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Dave Camp, R-Mich., are traveling the country together to build support for a sweeping rewrite of the code.

However, Obama’s plans could be derailed by his insistence on trading lower corporate rates for additional spending — a compromise Republicans quickly shot down when he pitched it this month.

Give tax breaks to firms that hire

Obama: “Let’s offer incentives to companies that hire Americans who’ve got what it takes to fill that job opening.”

Status: Not forgotten, but not likely.

Obama revisited the idea in his budget proposal in April, including a one-time tax credit for companies that pay less than $20 million in wages, hire more workers, or raise pay for their employees. His budget also would make permanent a temporary tax break for firms that hire returning veterans.

Business groups applauded both ideas, but the measures are not likely to pass through Congress — at least not as part of a budget. Republicans and Democrats are not close on their spending plans, and keeping the government running with continuing resolutions seems challenging enough, let alone passing a long-term budget.

Expand exporting opportunities

Obama: “We intend to complete negotiations on a Trans-Pacific Partnership” and “we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union.”

Status: So far, so good.

Companies are increasingly looking to sell their goods and services in other countries, and the president has taken steps to make the process simpler and more affordable.

In July, U.S. and European officials launched formal talks to create a transatlantic trade agreement that would strip away many hurdles for exporters.

Meanwhile, the administration is working on a Trans-Pacific Partnership with about a dozen Asia-Pacific nations, which would be the largest agreement of its kind.

Pass a budget that avoids sequestration

Obama: “Let’s set party interests aside and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future.”

Status: Swing and a miss.

A budget was not approved in March and all efforts to avert sequestration failed. Consequently, the government is slated to bleed about $85 billion in spending this year and cut close to $1 trillion over the next decade.

While large contractors, particularly in the defense industry, haven’t been significantly affected by the budget cuts, small contractors have been hit hard as government agencies scale back spending. A number of ideas have been floated to replace the cuts with other cost-cutting or revenue-generating measures, but none have gained traction.

Overhaul the immigration system

Obama: “Right now, leaders from the business, labor, law enforcement, faith communities — they all agree that the time has come to pass comprehensive immigration reform. Now is the time to do it.”

Status: Major steps forward, but big hurdles remain.

A bipartisan group of senators this year introduced and eventually pushed through one of the largest immigration overhaul bills in U.S. history.

On the whole, small-business and start-up advocates have supported the bill, which would help firms bring in more high-skill (think tech start-ups) and low-skill (think agricultural and seasonal firms) workers from around the world. However, some have complained that requiring employers to verify worker eligibility status through a new government portal would be too burdensome.

Despite its landslide passage in the Senate, the bill faces a much tougher road in the House, where Republican leaders want to tackle an immigration measure piecemeal, rather than in one large bill.

Invest in infrastructure

Obama: “I propose a ‘Fix-It-First’ program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country.”

Status: Held up by bigger fights.

The Obama administration has long advocated for economic stimulus projects that serve the dual purpose of creating jobs and repairing the nation’s creaking infrastructure.

In his latest compromise offering to Republicans late last month, he once again offered to trade tax cuts for their approval to spend more on programs to rebuild roads, bridges and other public-works projects.

Republicans balked at the offer, refusing to budge on more spending proposals. Already battling with an expanding debt, many of them say the government does not have the money for the president’s infrastructure plans.

Avoid a government shutdown

Obama: “Let’s agree right here, right now to keep the people’s government open.”

Status: Check back soon.

When Obama uttered those words in February, he was referring to a short-term spending bill that was scheduled to expire at the beginning of March. Policymakers were able to avert that crisis at the last minute, kicking the can down the road until September.

Now, it is upon them again. Republicans have threatened not to approve another resolution in order to force a defunding of Obamacare, putting both sides in a precarious position. Some pundits have warned that a shutdown is more likely this time around.